Who it is for
- Self-employed borrowers
- Investors
- Recent credit events
- Foreign nationals and ITIN borrowers
Typical Non-QM Loans requirements
| Income options | Bank statement, P&L, 1099, asset depletion, DSCR, WVOE |
|---|---|
| Minimum credit | Typically 600–680 depending on program |
| Max LTV | Up to about 90% on some programs |
| Credit events | Some programs allow 1–2 years after bankruptcy or foreclosure |
Figures are typical market ranges as of October 2026. Actual terms depend on the lender, your credit, the property and the program, and are confirmed on your Loan Estimate or term sheet.
How it works
- Pick the documentation that best shows your income.
- Lender verifies ability to repay under that method.
- Pricing reflects documentation, credit and LTV.
Try the Bank Statement Income Calculator
Pros and cons
Advantages
- Flexible documentation
- Faster after credit events
Trade-offs
- Higher rates than agency loans
- Larger down payments
Documents you’ll need
- Depends on the program chosen
Non-QM Loans FAQ
Are non-QM loans risky?
Non-QM loans still must meet federal ability-to-repay rules. They cost more because they do not fit the agency guidelines that let lenders sell loans to Fannie Mae and Freddie Mac.
What is the difference between QM and non-QM?
Qualified Mortgage (QM) loans follow strict federal documentation rules. Non-QM loans still verify you can repay, but accept alternative proof like bank statements, assets or rent. The tradeoff is a higher rate.
Who should consider a non-QM loan?
Self-employed borrowers, investors, people with recent credit events, foreign nationals and anyone whose real income does not show up cleanly on tax returns.
How much higher are non-QM rates?
Typically 1 to 3% above conventional rates, depending on the program, your credit and down payment. Stronger profiles get closer to conventional pricing.
Can I refinance out of a non-QM loan later?
Yes. Many borrowers start non-QM and refinance into conventional once their tax returns or credit catch up, usually after 1 to 2 years.
Do non-QM loans have prepayment penalties?
Some do, especially investor programs like DSCR. Owner-occupied non-QM loans often have no prepayment penalty. Ask before you lock.
How soon after bankruptcy can I get a non-QM loan?
Some programs allow it 1 to 2 years after discharge, versus 2 to 4 years for conventional. Foreclosure timelines are similar.
What is the minimum credit score for non-QM?
It varies by program, but 600 to 680 covers most options. Higher scores mean better rates and higher LTVs.
Are non-QM loans only for investors?
No. Plenty of non-QM programs serve primary homes, like bank statement and asset depletion loans for self-employed buyers and retirees.
Official sources
How Non-QM Loans compare
| Non-QM Loans | Bank Statement Loans | P&L-Only Loans | 1099 Loans | |
|---|---|---|---|---|
| Best for | Self-employed borrowers | Business owners and self-employed borrowers with heavy write-offs | Business owners with a CPA-prepared P&L | Sales reps, realtors, nurses, drivers and other 1099 earners |
| Down payment | , | , | , | , |
| Credit | Typically 600–680 depending on program | Typically 620–660 | Typically 640–680 | Typically 620–660 |
| Income docs | , | , | , | , |
Typical ranges, your Loan Estimate or term sheet confirms actual terms.
Coming soon: a 2-minute walkthrough from our loan team.
Related programs
Bank Statement Loans
A bank statement loan is a non-QM mortgage that calculates self-employed income from 12 or 24 months of personal or business bank deposits instead of tax returns.
P&L-Only Loans
A P&L-only loan qualifies a self-employed borrower using a 12- or 24-month profit and loss statement prepared or signed by a CPA, EA or licensed tax preparer, with no tax returns.
1099 Loans
A 1099 loan qualifies independent contractors using their 1099 forms (and sometimes a small expense factor) instead of full tax returns, so write-offs on Schedule C do not shrink your qualifying income..
Asset Depletion Loans
An asset depletion (asset utilization) loan converts your liquid assets into a monthly qualifying income, typically by dividing eligible assets by a set number of months, so retirees and investors with savings but little paycheck can qualify..
DSCR Loans
A DSCR loan is an investment-property mortgage that qualifies you on the property’s rental income divided by its monthly payment (the debt service coverage ratio).